Now All Assumptions Are In Question
The Forum News Service on North Dakota. “If 2011 was the year of the oil boom, 2014 could arguably be considered the year of Dickinson’s building boom. Months of pent-up demand for development – and for housing, in particular, as rent prices continue to rival those in much larger metropolitan areas – are expected to finally ease next year, as more private projects take off, said Community Development Director Ed Courton. The sudden drop in oil prices, which have fallen 40 percent since June, has shaken many investors and leaders in the Bakken. But Cooper Whitman, executive director of the Dickinson Chamber of Commerce, like Courton, said the slowdown likely won’t affect development in Dickinson in the long term.”
“Businesses aren’t looking to pull away from Dickinson, he said, because they understand that the oil slowdown is just temporary. ‘They’re not coming for the peak of an oil boom,’ he said. ‘They’re coming for the sustainable community that we’re building.’”
The Houston Chronicle in Texas. “The collapse of oil prices in 2014 has made it difficult for economists, both public and private, who until recently assumed oil would only drop to around $85 a barrel based on greater supply and less demand. Almost none expected prices to touch $54 a barrel, as they did this month, and now all assumptions are in question. The effect on the Texas and Houston economies is a matter of intense debate, but under no scenario will it be positive. The oil and gas industry is responsible for between 11.7 percent and 13.5 percent of the economic activity in Texas last year, depending on the analyst.”
“Barclays warned that the Texas housing market correlates with oil prices and therefore could take a major hit if oil prices stabilize at current levels. Offshore driller Transocean has announced the shutdown or sale of 10 rigs, and Houston-area companies that build well equipment are bracing for order cancellations. Halliburton CEO Dave Lesar has announced more layoffs are coming next year. ‘We will not be immune to market conditions, and right now it looks like 2015 is going to be a tough year,’ Lesar said in an email to employees. Quite a few roughnecks and field engineers will soon be out of work and packing their pickups to return to Houston. For them, 2015 could be very hard.”
The Arizona Republic “Floyd Scott, president of Century 21 Arizona Foothills, which has two of its seven Valley offices on the west side, offered a bright outlook based on low interest rates.The $150,000 to $225,000 market is hot as jobs continue to expand, and retired and second-home buyers are back in the market, he said. ‘The only negative might be the Canadian buyer, as oil prices and currency valuations might slow them down this year,’ Scott said.”
“David Friedman, branch manage for the West Valley office of Russ Lyon Sotheby’s International Realty in Peoria, said, ‘I expect a strong 2015 where buyers and sellers will get back to being on more equal footing.’ In Glendale, at the end of 2013, he said only a $6 per-square-foot difference existed between asking and sales prices. In the second quarter of 2014, Glendale seller confidence exceeded the market. Asking prices were at $143 per square foot; sales prices were only $103 –– a $40 per-square-foot difference. ‘Luckily for them, Glendale sellers are now looking more realistic, at $120 asked against $106 per square foot sold,’ he said.”
“The new-home market is also improving and should continue upward in 2015, barring the traumatic, said Jennifer Moore, an agent with West USA Realty in Peoria. ‘With 20 builders and more than 37 new subdivisions in progress, and more expected to open in 2015 just within the 85383 zip code in Peoria alone, the housing industry in 2015 for the West Valley should prove to be extremely successful,’ Moore said.”
The Miami Herald in Florida. “Sales of existing condos in Miami-Dade County plunged 15.5 percent in November from a year earlier to 1,077 units, according to the Miami Association of Realtors. Miami-Dade existing condo sales in November were down 28.6 percent from October, which tallied 1,508 closings, and single-family home sales were off 19.3 percent from the prior month, when 1,204 sales were completed, the Miami Realtors said. The inventory of existing condos soared to 11,515 units in November, up 16.9 percent from a year earlier. Existing condos listed for sale are facing rising competition from the various pre-construction projects around Miami.”
“The condo inventory amounted to 8.4 months of supply, the highest level since the housing recovery took hold. Buyers negotiated slightly more price discounts in November, according to the statistics. Single-family homes sold at an average of 93.5 percent of original list price, compared with 95.3 percent a year earlier. Condos fetched on average 91.9 percent of original list price, down from 94.4 percent in November 2013. ‘Considering the steady rise of closed sales in the past several months, statistics like this are bound to happen,’ said Marnie E. Allen, president of Greater Fort Lauderdale Realtors.”
The Colorado Springs Gazette. “The Colorado Springs area’s unemployment rate declined by nearly a third, from 7.8 percent in October 2013 to 5.4 percent in October of this year. But dig a little deeper, and a bleaker picture emerges. Nearly half of the drop in the jobless rate resulted from more than 3,500 area residents leaving the local labor force. Fred Crowley, a local economic consultant, concluded that more than 4,700 residents in their prime working years - ages 35 to 54 - had exited the local job market during the same period.”
“The reason, he believes: Wages in the Colorado Springs area have declined since 2000 as the local economy has traded high-paying jobs in manufacturing, information technology and construction for low-wage jobs in the hotel, restaurant and call center industries. The average pay of jobs that were lost is nearly three times higher than the jobs that replaced them, resulting in a decline in the area’s wages of more than $150 million between 2010 and 2013.”
“‘This is scary. We need to grow technology and manufacturing,’ Crowley said. ‘Most of the people who have dropped out of our labor force probably have left the area. The inference is that they lost good opportunity and there are no longer good opportunities here. Without high-wage jobs, average incomes will continue to decline, residential housing prices could soften and consumer purchasing may decline,’ Crowley warned. ‘Unless corrected, we face a dark economic future in El Paso County.’”
The Star Tribune in Minnesota. “Free residential lots in Claremont, Minnesota! Sound like a scam? Officials in this southeast town of 548 people think that may explain why the offer has no takers. Not now. Not for years. A developer bought the land for a subdivision but stopped after building one house when the housing market crashed in 2006. That left the town with $450,000 in bond payments and 14 empty lots. At first Claremont tried to sell the lots, worth $28,637 apiece. No one came calling, so the town made the lots free.”
“‘I think it was just one of those things that people thought was too good to be true.’ said City Clerk Liz Sorg. ‘We’re trying to advertise them a bit more and get the word out that it is a for-real deal,’ Sorg said. ‘It is a free lot we’re willing to give you.’”
“There’s also the added pressure of needing people to move into the lots to generate revenues for the bonds on the failed development. ‘We’ve tried about everything possible to try to get somebody to build on these lots,’ said Ginny Busch, Claremont’s former mayor. ‘We have to keep paying — the bonds don’t go away. The road is in. It’s all paved. There’s water. There’s sewer. There is electrical. There’s curbs.’ But, she lamented: ‘No houses.’”
I did find a report from Louisiana on the oil angle:
‘Numbers show 2014 is a record breaking year for Lafayette Parish in real estate sales. Coldwell Banker Pelican Real Estate calls it the “Best year, ever!” “2014 will be the new record real estate sales year ever in the parish, surpassing 2013’s numbers,” said Steven Herbert, COO of Coldwell Banker Pelican Real Estate.’
‘Following the housing bust in 2008, he said Lafayette’s market has always done well. “We didn’t lose a lot of value, we just had fewer sales,” said Hebert. “It leveled off more really than going down into a bad market. We just had fewer sales.”
‘New home construction and families we are able to buy a bigger home is the main reason for the increased sales. Hebert said agents sold 3,300 homes at more than $710 million this year.’
‘With falling oil prices, Hebert said the price drop could affect the real estate market. “My personal belief is dropping oil price will affect hiring and employment in Acadiana, that will have an effect on real estate sales,” said Hebert.’
“We didn’t lose a lot of value….and families we are able to buy a bigger home…”
Which is it Ehbear?
Buckle up anyway, 2015 may remind you of the late 80s.
“‘I think it was just one of those things that people thought was too good to be true.’ said City Clerk Liz Sorg. ‘We’re trying to advertise them a bit more and get the word out that it is a for-real deal,’ Sorg said. ‘It is a free lot we’re willing to give you.’”
Maybe if they didn’t try so hard to make it sound like a scam, they could garner some interest. What’s the real bottom line for building there?
“What’s the real bottom line for building there?”
Read on a bit and maybe we will find out …
‘It is a free lot we’re willing to give you.’”
So far, so good …
“There’s also the added pressure of needing people to move into the lots to generate revenues for the bonds on the failed development.”
“… generate revenues …”
Aha! Now were are homing in …
“Generate revenues = Generate TAXES!
“… generate revenues for the bonds on the failed development.”
Translation: Give schmucks the lots, then tax the hell out of them so as to bail out a “failed development”.
Sign me up.
The most expensive lot you may ever own just may be the free lot that the city fathers of Claremont, MN will generously hand over to you.
That left the town with $450,000 in bond payments and 14 empty lots..‘We have to keep paying — the bonds don’t go away. ??
Oops…Got to have the developer on the hook for the bond on the front end until the development is substantially completed…After that, municipality can take over servicing and the bond obligation…
Oops…Got to have the developer on the hook for the bond on the front end until the development is substantially completed…
+1. Claremont Planning Commission fail.
Did it occur to you the omission was intentional?
“Southeast town of 548″
The ommission was probably a condition of development in the first place.
Unlikely Donk.
You are such an asshole
Hopelessly underwater and enraged.
‘Fitch Ratings warns that Texas has the most overvalued home prices in the country and that a correction may be coming thanks to falling oil prices. “After largely skirting the excesses and downsides of the last housing boom, significant recent growth has made Fitch cautious on the Texas housing market,” the New York-based financial analyst says in a just released report. “Fundamentals do not appear supportive of current prices and the economy is vulnerable to the energy sector.”
“Overall, Fitch views Texas prices as approximately 11 percent overvalued, with prices in Houston, Austin, and Dallas each growing by over 20 percent since 2011,” Fitch said.’
‘Texas home price gains have already cooled from late last year and early in 2014. But the year-over-year gains in residential prices in the Dallas-Fort Worth area is still running about twice the long-term average rate and are higher than nationwide increases.’
‘During the recent recession when many metropolitan areas in California, Nevada and Florida lost 50 percent or more of their home values, Texas prices fell only slightly.’
‘And the housing markets in Dallas, Houston, Austin and San Antonio were some of the first in the country to recover.’
‘Although Houstonians might reassure themselves with the idea that their economy is more diverse than it was before the oil bust, the city’s fate is still inextricably entwined with the price of oil and gas. About 38 percent of all the region’s jobs are directly tied to the energy industry, according to the Greater Houston Partnership.’
‘Texas has enjoyed relatively high and stable oil prices for the last five years, with the cost of crude nearly tripling between 2009 and 2012, peaking at $138 a barrel. But last month, OPEC’s failure to agree on production curbs – coupled with the fact that hydraulic fracking has made the U.S. the world’s largest producer of oil — sent the price of crude plunging. On Dec. 26, it’s around $60 a barrel.’
‘So Texans are reading some disconcerting economic forecasts. That price drop prompted JPMorgan Chase to draw parallels with the 1980s oil bust and warn that Texas could fall into a regional recession. Meanwhile, Fitch Ratings declared that Texas has the most overheated housing market in the nation, specifically citing the white hot home price hikes in Houston.’
‘But economic forecasts are as common as crystal balls, and their messages are sometimes contradictory. Talk to other economists and you’ll hear that Houston’s economy will do just fine in 2015, perhaps growing at a slower pace but continuing to add jobs at a rate that other cities would envy.’
“Being one of the most overheated in a country where the housing market is pretty depressed is not quite the same thing as being overheated when the whole economy is doing well,” said Steven Craig, an economist with the University of Houston.’
“About 38 percent of all the region’s jobs are directly tied to the energy industry…”
As if the rest is disconnected.
‘During the recent recession when many metropolitan areas in California, Nevada and Florida lost 50 percent or more of their home values, Texas prices fell only slightly.’
Yet prices tripled from 1998-2008 and are still multiples of construction costs(lot, labor, materials and profit).
San Diego County definitely did not lose fifty percent of its value, or anywhere near that, thanks to the all-cash Chinese investors. Now that China is experiencing deflation and the investors are getting cold feet, what’s gonna prop up San Diego prices?
“Almost none expected prices to touch $54 a barrel, as they did this month, and now all assumptions are in question. The effect on the Texas and Houston economies is a matter of intense debate, but under no scenario will it be positive.”
Falling prices is always positive!!
Dallas, TX Sale Prices Negative YoY; Plunge 13% MoM, 4% QoQ As Sellers Slash
http://www.zillow.com/dallas-tx-75219/home-values/
falling prices in 1920 lead to the biggest boom ever
key is little gov intervention
Exactly.
“Glendale seller confidence exceeded the market. Asking prices were at $143 per square foot; sales prices were only $103 –– a $40 per-square-foot difference.” ‘Luckily for them, Glendale sellers are now looking more realistic, at $120 asked against $106 per square foot sold,’ he said.”
Why are asking prices 200% higher than construction costs(lot, labor materials and profit)? One word. Fraud. And now prices are headed down.
Glendale(Phoenix), AZ Sale Prices Sink 5% YoY As Speculators Slash To Pay Down Toxic Debt
http://www.zillow.com/phoenix-az-85304/home-values/
“Miami-Dade existing condo sales in November were down 28.6 percent from October, which tallied 1,508 closings, and single-family home sales were off 19.3 percent from the prior month,
Collapsing demand and ballooning inventory requires some price slashing. A 14% reduction isn’t nearly enough considering current asking prices are double construction costs.(lot labor materials and profit). Get slashin’ boys.
Miami Lakes, FL Sale Prices Plummet 14% YoY
http://www.zillow.com/miami-lakes-fl/home-values/
Economists saw oil at $85 because that is the minimum price needed to assure an adequate supply. The current price is due to manipulation and cannot last.
Market prices are manipulation and manipulated prices are market prices?
Youre confused Dan.
Economists are some times blatantly wrong.
Economist only see what has already happened, and that through a cloudy mirror.
“The current price…cannot last.”
Magical thinking. As if the market cares what you “need” for your oil. If peak credit mania has now passed, all these fantasies, like $100/bbl oil, are over for quite a while.
‘Wages in the Colorado Springs area have declined since 2000 as the local economy has traded high-paying jobs in manufacturing, information technology and construction’
CO, WA and CA; this is your future. Has MSFT announced the next wave of layoffs yet?
Colorado Springs, CO Sale Prices Dive 5% YoY As Housing Price Correction Resumes
http://www.zillow.com/colorado-springs-co/home-values/
‘At first Claremont tried to sell the lots, worth $28,637 apiece. No one came calling, so the town made the lots free.’
Historically land has always been a speculative money losing proposition and this debt fueled scam demonstrates it perfectly. If you’re paying much more than $800/acre, you’re getting ripped off. Remember… There is a globe full of worthless dirt and 95% of it goes undeveloped.
Minneapolis, MN Sale Prices Crater 10% YoY; Collapse 25% QoQ As Housing Demand Plummets Nationally
http://www.zillow.com/minneapolis-mn-55410/home-values/
IMO the housing bubble has been going on for much longer than almost anyone realizes:
‘Between 1970 and now, household net worth has more than tripled on an inflation-adjusted basis and now totals $81 trillion on a nominal basis. But this asset price appreciation — both financial assets and housing, the latter of which makes up the bulk of the wealth of Middle America — masks a stagnation in incomes. On an inflation-adjusted basis, average hourly earnings are actually below where they were in 1970. As a result, Americans have grown reliant upon asset price gains to compensate for median household income about 10 percent below the highs reached during the dotcom boom.’
‘The reason most Americans feel wealthy is that the median price of new homes sold has gone from $22,300 in 1970 to $280,900 now.’
‘The rise has been enabled by the expansion of easy credit terms, a growing share of family budgets dedicated to housing costs, as well as the “trade up” of boomers from one house to another. Consider that in 1984, new homes sold for 3.6 times median household income compared to 5.1 times now.’
‘And this brings us to the pressures hitting millennials as they try to participate in the American Dream as lived by their parents. For those who are taking the bold step of venturing out on their own, they are faced with trying to buy expensive homes without the benefit of home equity to roll over, and burdened by the stratospheric rise of education costs (which have tripled since the mid-1990s), low starting wages and hefty student loan debts.’
‘According to the Economic Policy Institute, the wages of young college grads are stuck at levels seen in 1989 on an inflation-adjusted basis. But in 1989, student loan debt totaled roughly $291 billion according to Federal Reserve data. Now, it’s over $943 billion, as college is pushed as a way to overcome the financial hurdles young people face. EPI data shows that the share of young high-school graduates enrolled in college or university grew from less than 45 percent in 1989 to a peak of 60 percent in 2012.’
‘The Pew Research Center has found that the share of adults who have never married has doubled since 1970, and one in four young adults today may never marry at all. Multi-generational living has doubled since 1980. The National Association of Realtors reports that the share of first-time homebuyers has dropped to the lowest levels since 1987.’
‘Before baby boomers dismiss all this as youthful indignation, or engage in some self-adoration, there could be a catch. Remember, asset price gains exist only on paper until the assets are sold. Realizing those gains requires a buyer for every seller.’
‘The trouble is that as more baby boomers approach and enter retirement, they will need someone else — the millennials — to buy their homes and their stocks at a high price. If they don’t, those paper gains could disappear.’
‘The rise has been enabled by the expansion of easy credit terms, a growing share of family budgets dedicated to housing costs
The article conveniently forgets the entrance of women into the full-time professional workforce in the late 70’s-early 80’s, thus paving the way for house prices to rise to soak up the available higher household income. And, Ben, when does a bubble turn into a new normal? Is 45 years enough for you? In that time frame, I could buy two houses outright. Even if the bubble popped to zero, I would still have done better than if I had rented.
Using your math, anything is possible.
‘I would still have done better…’
This blog isn’t about personal enrichment nor is it a rent versus buy calculator. If these bubbles made people richer, California would be the richest state in the US. Instead it’s the poorest. Dead last. Coincidence? Look at the Colorado Springs article above. A very expensive housing market, and the economy has hit a brick wall.
‘the median price of new homes sold has gone from $22,300 in 1970 to $280,900 now’
And wages are stagnant or lower. The size of this dislocation should concern every economist. What we’ve witnessed is the confluence of enormous events. Globalization. The purposeful policy of turning the US into a consumer modeled economy. The US went, in 10 years, from being the biggest creditor nation to the biggest debtor. Social security was turned into a ponzi scheme. And the US government now owns 90% the housing debt market. If what Greenspan did was dumb or reckless, what Bernanke and his pals have done is complete insanity. I can point to any number of statistics that show housing and stock bubbles make us poorer. Is everybody getting poorer and poorer, more in debt every year, some new normal to be embraced? Or is it a long-building disaster, only needing some circumstances to start its unwinding?
One thing almost always shows up when the housing bubble produces negative outcomes. The media flails around, “why are there only waitress-fast food jobs? We have to get house prices up; that will fix everything.” It’s a fundamental misunderstanding of the problem. And as I’ve said for many years, if you start off with this misunderstanding, it is impossible to make progress.
+1 Ben….
And wages are stagnant or lower. The size of this dislocation should concern every economist. What we’ve witnessed is the confluence of enormous events. Globalization… A very expensive housing market, and the economy has hit a brick wall…
Look at the Colorado Springs article above. A very expensive housing market, and the economy has hit a brick wall.
The same is true up north in Larimer County. The quality employers in the area keep laying off. HP has buildings that are completely empty at the Ft. Collins campus. I wonder how long until that campus is closed.
The quality employers in the area keep laying off. HP has buildings that are completely empty at the Ft. Collins campus. I wonder how long until that campus is closed ??
Which goes to Ben’s point Colorado….We have a lot of housing markets who’s pricing has been built on jobs & income…Tech in Ft. Collins, Oil in Houston…When the market changes (see oil) or tech lays off (see Ft. Collins HP) then there will and should be a residuale effect on the valuations of housing that were built upon those jobs & industry….
Lets look at the big picture and Look what happened to Detroit…Yes, mismanagement plays a role but you can mismanage for a very long time if the revenue stream is constant and growing…When the revenue stops, Companies leave or become uncompetitive (see globalization) then, the revenue stream contracts, more people leave, the mismanagement now has no cloths and its a death spiral…
As all this relates to housing, Detroit is the poster boy for it…In todays inflation adjusted dollars, what were some of those abandoned houses in detroit, near the Packard plant, what would those houses be worth ?? Today, you can buy them for a dollar…
Now youre looking at the future of CA.
Ben:
The question then is what has driven this bifurcated market in Co Spgs? On one side as the article notes housing has gone up and I would assume past the means of an ordinary fam to purchase and with it the loss of jobs etc. Both the army and the air force have large encampments there. Could the transitory nature of these sorts of ‘jobs’ have something to do with the bifurcation where renting or subsidized fed housing is preferable and leaves a ‘warp’ in the market after a period of time?
Just wondering.
South end of the Springs when I was there in early Oct. this year reminded me of areas of LA following the defense contractor dismantling in the early 1980’s - Lockheed in Burbank comes to mind and it was not pretty.
Now you have a template for the rest of the state, WA, CA and OR.
” What we’ve witnessed is the confluence of enormous events. Globalization. The purposeful policy of turning the US into a consumer modeled economy. The US went, in 10 years, from being the biggest creditor nation to the biggest debtor.”
Globalization and increased consumption in the US was only possible through the surrender of wealth, and then in the accumulation of debt.
1970 is the year I graduated High School. I have been in the workforce this entire 45 years and thought for most of it our wealth was increasing!
“The US went, in 10 years, from being the biggest creditor nation to the biggest debtor.”
Wait, which 10 years?
The point is that this spectacular process has been going on your entire life. You don’t know anything else. That makes you rather unique in the big scheme of things. We expect you will see something different while you are still here.
That’s a good point. I didn’t realize how young The Donk is.
“‘the median price of new homes sold has gone from $22,300 in 1970 to $280,900 now’
And wages are stagnant or lower.”
New home prices are not inflation adjusted. A new home is a luxury, what about existing home prices?
MEDIAN household income is stagnant if you adjust for inflation. However, incomes are not stagnant for all strata of households.
A nit if we are talking about a few years.
Very meaningful if we are talking about 45 years.
On an inflation adjusted basis, the $22,300 should be $135,726 now. So, on a real basis, home prices have approximately doubled in 45 years.
Median Household Income HAS been stagnant over that time.
So, your point is not lost on me—new home prices have gone up far faster than household income, but it’s not as extreme as 10x vs flat. New home prices have doubled, median wages have been flat. This seems very out of whack.
However, the top 20% of households’ incomes have gone up more than 50%. And the higher earners are more likely to be buying new homes…the higher earners being able to buy new homes has allowed new home prices to rise.
Now, what about REAL existing home prices? After all, existing home sales represent 75%+ of all home sales. According to Shiller, they have gone up about 40% from 1970 to today.
So there is the data from 1970 onward:
Real income for the average Household? FLAT.
Real income for the top 20% of Households? Up 70%+
Real New Home Median Price (less than 25% of sales each year)? Up approximately 100%
Real Existing Home Median Price (more than 75% of sales each year)? Up approximate 40%
More and more, owning a home is pulling out of reach of the average household, but not all households. If they were not pulling out of reach of all households, prices would not be so high.
Personally, I think all of this is happening due to market distortions.
I think it would be really interesting to go through a list of market distortions and how they are impacting prices (both rents and sale prices).
Government should be doing less, not more.
And real median resale housing prices are 3x construction costs.
Did you think I wouldn’t remind you?
It’s a salient point that women’s wages allowed housing prices to rise but the corollary to that is the loss of good paying union jobs and the replacement of poverty wages for both men and women.
The other distortion is that for professionals, a two income family can propel home prices higher than other couples can afford , so one couple buys an overpriced house and the other couple stuffs into a one bedroom apartment.
So then you have a more severe stratification of society than you would have otherwise .
‘women’s wages allowed housing prices to rise’
Women were just dying to go to work so the money they made could be eaten up by higher housing prices? You know, what I remember from that time was women had to go to work because times were hard.
You can’t make this stuff up. It’s like a deliberate revision of history.
Charges For Fraud Throughout San Francisco, Alameda And Contra Costa Counties
http://www.justice.gov/atr/public/press_releases/2014/310778.htm
‘Foreign investors have had just about enough of Abenomics. After pumping record amounts of cash into Japanese shares last year, they’ve hardly added to holdings in 2014. Inflows are down 94 percent this year to 898 billion yen ($7.5 billion), on pace for the smallest annual amount since the 2008 global financial crisis.’
“We need to see a framework where growth isn’t dependent on monetary easing,” Ayako Sera, a market strategist at Sumitomo Mitsui Trust, which oversees $325 billion in assets. “If not growth, then at least a way to increase productivity. For now there’s nothing like that, so I imagine it’ll be hard for stocks to keep going higher and for foreigners to take an interest in them.”
“We need to see a framework where growth isn’t dependent on monetary easing,” Ayako Sera ??
All these fund & wealth managers…They have gorged themselves on cheap, easy money now for 5 years….Probably tripled the net worth of their portfolios and now that everything is priced to perfection, they are swimming in mountains of cash, they are turning to the last underperforming asset…Cash…And they want rates to rise now….I got mine….Screw everybody else…Party door is now closed…Raise rates to the moon, shake the tree so I can buy more assets with the mountain of cash I have on hand or just earn a higher return on it..Hypocrite Ba$turds….These are the real financial parasites in our system…
Shouldn’t rates be higher? I mean how long should rates be kept at 0%?
‘They’re not coming for the peak of an oil boom,’ he said. ‘They’re coming for the sustainable community that we’re building.’”
LOLZ. Priceless. The true believers never see it coming.
Yup, nothing says “quality of life” like “boom town”
Yup, nothing says “quality of life” like “boom town” ??
Happens all the time…Don’t we learn…Could the Dakota’s be the next one to learn…
Was there not a song a while back called ‘Boom Town’ - can’t remember the band’s name.
You do realize that was an ironic song?
Sustainable community based on what? Maybe global warming will make it an agricultural paradise?
“At first Claremont tried to sell the lots, worth $28,637 apiece. No one came calling, so the town made the lots free.”
Two fools in any business transaction. One who prices to high and the other who prices too low.
In the late 80’s Govt of Canada was having a program where a window replacement contractor could offer and insulate homes for free and people did not believe and thought it was a scam. Then the contractors started offering insulating homes for $99 and the people thought it was a great deal and bought. The contractors were getting paid by the Govt.
“There’s also the added pressure of needing people to move into the lots to generate revenues for the bonds on the failed development. ‘We’ve tried about everything possible to try to get somebody to build on these lots,’ said Ginny Busch, Claremont’s former mayor. ‘We have to keep paying — the bonds don’t go away. The road is in. It’s all paved. There’s water. There’s sewer. There is electrical. There’s curbs.’ But, she lamented: ‘No houses.’”
Common you morons!! Do you really need to think on this one? Do what the Democrats do in NY, raise the fricken property taxes and then go have lunch. Why even think about it. Silly people.
raise the fricken property taxes and then go have lunch ??
Can’t raise them until you off them on the private sector…Why do you think they are giving them away….
I think he means that they should raise taxes on existing property owners. Problem with that though is they’re probably tapped out and would revolt if taxes were raised.
Problem with that though is they’re probably tapped out and would revolt if taxes were raised.
You will be surprised how much property tax abuse people are willing to suffer. NYS is a prime example. 4 to 4.5 percent of the inflated tax value of the property is the norm.
I think we are 2nd highest in the nation when it comes to property taxes. People have been conditioned to take property tax abuse I don’t know why?
For two generations, house prices were cheap in upstate NY, because we were in a depression. Then it got manic.
The argument can be made that we have not had a real economy since the 1973-1974 Recession.
I’d say from what I have seen that 40% of our population are relatively okay and that the other 60% are on its way to being displaced.
My son is a successful educated Millennial who is watching me struggle with a menu of possibilities. (I’m in Inning 8.) A discourse with him is invaluable. He’s the new $100K/year with no down payment. In short, he’s not buying my house unless 5% down is offered.
We have a few Chinese speculators who are already burned in the neighborhood..
e have a few Chinese speculators who are already burned in the neighborhood ??
What zip ??
Which ironically was the last period of time before we started post-Bretton woods economics.
33157
WSJ: Don’t Buy a Home as an Investment